It has been more than thirty years since a humble gentleman by the name of Bruce Bent formed the first money market mutual fund in 1970.

From humble beginnings and working full time from the age of 14, Mr. Bent served in the US Marine Corps, then attained a degree in economics from St. John's University and an MBA in corporate finance at New York University.

After founding his financial services company, he created an innovative product that provided high credit worthiness, safety, better returns than certificates of deposit along with more flexibility and daily liquidity.

The money market mutual fund was born.

As is the case with any innovation, the early days of an idea are often slow to catch on; the money market fund concept was even dismissed by some of the big brokerage players of the day.

Today, on a global basis, it is estimated there are more than 8,000 money market funds in the US alone and the global total aggregate holdings of these funds exceeds more than $2.5 trillion. Mr. Bent's firm The Reserve alone manages in excess of $70 billion.

In 2005, in recognition of his contribution to the financial world, he was accepted into the Financial Planning Hall of Fame.

Money market funds have always been considered a safe haven because of their underlying composition, often known as a basket of short-term government and high grade corporate debt with maturities of less than 270 days, generally more in the neighbourhood of 30-90 days shelf life.

Primarily focused on US Treasuries of various yields along with commercial paper issued by very large corporations with high credit ratings, money market funds must operate under very strict guidelines issued by the US Securities and Exchange.

The Investment Company Institute website www.ici.org provides further information on money market funds.

In addition to requiring that money market funds invest only in high-quality, low-risk securities, SEC rules mandate that money market funds maintain a diversified portfolio.

This limits a fund's economic exposure to any single issuer. For instance, in general, money market funds may not invest more than five percent of assets in securities of any single issuer, with the exception of securities issued by the federal government.

Money market funds are regulated by the US Securities and Exchange Commission (SEC), primarily under the Investment Company Act of 1940. Rule 2a-7 of the 1940 Act includes several risk-limiting conditions, which are intended to minimise the likelihood that the fund's share price will deviate from $1.00.

These risk-limiting conditions govern the credit quality, diversification, and maturity of money market fund investments. It is unlawful for any mutual fund to use the term "money market" if it does not meet the Rule 2a-7's risk-limiting conditions.

Over the past few weeks, as markets reacted to the subprime mortgage debacle in the US (and in the UK), more risky investments have been redeemed and placed in the safety of money market funds - only for investors to see reports that some components of some money market fund brands may also be exposed, indirectly, to corporate debt that may have underlying exposure to mortgage or asset backed CDO security problems. Of course, in jittery capital markets, every rumour, every nuance, every financial news network discussion can cause concern with everyday investors. As one client said to me, "The more I try to understand these investments, the more confused I become. And that is why I come and talk to you."

And, therein lies the answer for the everyday investor. You need clarity, objectivity and experienced market wisdom imparted by your representative, some of whom have seen this all before. Do not succumb to this hysteria. If you are concerned about your investments, now is the time to pick up the phone, or go and see your sales representative.

Better yet, expect a phone call from him or her. During volatile market conditions, experienced professionals will reach out to their clients - knowing that they may become inordinately concerned.

Your sales representative will be able to provide his/her understanding and guidance in perceived adverse market conditions.

Have a conversation about what you have chosen for investments. Ask if they are still considered low risk (and not exposed to the subprime market).

Consider whether they are still suitable for you. Ask how they are performing (or holding up) in this market, and whether they will still help you meet your goals and objectives.

Review how these investments performed during the last market crisis. Did they remain less volatile and recover to continue appreciation? If all of your investments appear to be holding their own for your long-term goals and your needs have not changed, you can breathe easier. Now, don't you feel better?

Martha Harris Myron CPA CFP® is an internationally qualified (dual citizen US and Bermuda) Wealth Manager at Argus Financial Limited. She specializes in investment advisory services and comprehensive financial planning solutions for private clients, successful business owners and their families. DirectLine: 294 5709 Confidential email can be directed to marthamyron@northrock.bm

The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.